Verify All Your Income Sources
One of the most common mistakes first-time filers make is reporting only their primary salary. The Income Tax Department, however, has a comprehensive view of your financial life through the Annual Information Statement (AIS). Before filing, you must
cross-reference your salary from Form 16, interest earned on savings accounts and fixed deposits, any income from freelance work, and capital gains from investments. Forgetting to report all income sources can lead to a tax mismatch and a notice from the department later. It is essential to review your Form 26AS and AIS thoroughly to ensure every source of income is accounted for.
Claim Every Available Deduction
Don't leave money on the table. The old tax regime allows for numerous deductions that can significantly lower your taxable income. Many first-time filers are eligible for deductions under Section 80C, which covers investments in Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), life insurance premiums, and more, up to a limit of ₹1.5 lakh. Beyond that, you can claim deductions for health insurance premiums paid for yourself and your parents under Section 80D, contributions to the National Pension System (NPS), and interest on education loans. Even if you've opted for the new tax regime, a standard deduction is still available for salaried individuals. Ensure you have proof for all declared deductions, as you may be asked to furnish them later.
Choose the Correct ITR Form
Filing with the wrong Income Tax Return (ITR) form is a frequent error that can get your return marked as 'defective' by the tax department. If you are a salaried individual with an income up to ₹50 lakh and own one house property, ITR-1 (Sahaj) is likely the correct form for you. However, if you have income from capital gains (like selling stocks or mutual funds) or own more than one house property, you will likely need to file ITR-2. Individuals with income from a business or profession must use ITR-3 or ITR-4. Selecting the right form is crucial for a smooth filing process.
Double-Check Personal and Bank Details
A simple typo in your personal information can cause significant delays. Carefully check that your name, PAN, Aadhaar number, address, and email ID are all correct. Most importantly, ensure you have provided the correct bank account details and that at least one account is pre-validated on the income tax portal. This is the account where you will receive any tax refund. Incorrect bank information is a primary reason for refund delays. It is also mandatory to report all bank accounts you hold, not just the one you use for your salary.
Understand the Final Step: E-Verification
Simply filing your return and paying the tax is not the end of the process. Your ITR is considered invalid until you have completed the e-verification step. You have a 30-day window to verify your return after filing. The easiest and most common way to do this is by using an Aadhaar-linked OTP. Other methods include using your net banking portal, a Demat account, or a Digital Signature Certificate (DSC). Once you e-verify, you will receive an acknowledgement, and only then is your filing process truly complete.
